The following is a summary of the SmartCentres Real Estate Investment Trust (CWYUF) Q3 2024 Earnings Call Transcript:

Financial Performance:

• SmartCentres REIT reported strong Q3 financial results, with same-property NOI increasing by 8.2% excluding anchors and 5% overall. The FFO per fully diluted unit was $0.71 compared to $0.55 in the same quarter last year, driven by higher rental revenue and a fair value adjustment.

• Net operating income increased by $5 million or 3.4% from Q3 last year, largely due to an increase in base rents, partially offset by a decrease in condo and townhome closings.

• The pay-out ratio to AFFO for Q3 2024 was 75.2%, and the adjusted debt to adjusted EBITDA was 9.8x, showing a slight decrease from the previous quarter.

Business Progress:

• SmartCentres REIT's occupancy rate further increased to 98.5%, demonstrating solid demand and strategic location effectiveness.

• The company continued its expansion with new retail constructions and achieved rental rate lifts of 6.1% including anchors and 8.9% excluding anchors from lease extensions.

• Construction is advancing for the 36-story ArtWalk project and the Vaughan Northwest townhomes, and the completion of the 224,000 square foot retail center anchored by Canadian Tire is on schedule for early 2026.

• Additionally, SmartCentres REIT made progress in its opportunistic industrial development and residential permissions, enhancing long-term asset value.

Opportunities:

• SmartCentres REIT emphasized the strong demand for new builds in existing shopping centers and intensification of land use, suggesting significant opportunities for growth and development.

• The company plans to capitalize on zoning achievements and optimized market conditions to facilitate asset sales or project commencements in the near future.

Risks:

• Mitch Goldhar mentioned potential challenges related to market conditions and the timing necessary to align for project developments or asset sales, indicating caution in expansion amid economic fluctuations.

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